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Unemployment in France surpasses three million

The number of unemployed people in mainland France surpassed three million for the first time since 1999, new labour ministry data showed Wednesday, as French President François Hollande prepares to unveil his 2013 budget this week.

French unemployment topped three million for the first time in over a decade, data showed Wednesday, as the country faces a yawning budget gap like those plaguing its southern eurozone neighbours.

The number of jobless in mainland France swelled to 3.011 million in August, 23,900 more than in July, Labour Ministry figures showed, the first time since 1999 that the figure has breached the three million mark.

Some 4.494 million people, including some who are partially employed, have registered themselves as actively looking for work on the French mainland. This is 40,800 more than in July and a record since the ministry began collecting comparable data in 1991.

"These three million unemployed embody the failure of economic and social policies undertaken during the last few years," the ministry said in a statement.

"In the face of this difficult report, the government is determined to implement as soon as possible" reforms, it said.

With the number of people out of work already reaching 2.99 million in July, the French government had expected a further rise in August, with Labour Minister Michel Sapin saying in early September that the symbolic figure of three million had been breached.

French President Francois Hollande earlier this month pledged to reverse the trend in a year's time, a target that Sapin said Tuesday was "reachable".

However, an economist at the French Economic Observatory, Eric Heyer, believes that annual growth of 1 percent is necessary to stabilise the rate of unemployment and that 1.5 to 2 percent in growth is needed to reduce the number of people out of a job.

The government has forecast 0.3 percent growth for the year, and has so far kept its 2013 target at 1.2 percent, which most economists now consider unrealistic.

France's central bank this month predicted that the eurozone's second biggest economy would contract by 0.1 percent in the third quarter after flat-lining for the first half of the year.

Amid the gloom, French consumer confidence slipped two points in September from the previous month, the national statistics office said earlier Wednesday.

The consumer confidence index fell to 85 points from 87 in July and 90 in June, figures released by INSEE showed.

The data came a day after another set of INSEE figures showed French business leaders and industrialists deeply pessimistic about their business prospects.

In line with a pact agreed by eurozone leaders earlier this year, France is committed to reducing the size of its deficit from around 4.5 percent of gross domestic product (GDP) this year to 3.0 percent in 2013 and to balance the budget by 2017.

Hollande, who took power in March, unveils his first budget on Friday, which is aimed at generating 30 billion euros in new taxes and savings to plug a budget gap and to kickstart the flagging economy.

Slashing government overspending is seen as vital to ensure the survival of the euro amid a lingering debt crisis but economists have warned that a sluggish economy and the impact of the planned fiscal measures will make it hard for these targets to be met.